EM investors put focus on India Budget, Chinese rate cut
The Budget is in line with the government’s policy direction – a direction that has been consistent since Modi was elected. Overall, I think it was a good budget as the government has made it clear that they need to stimulate infrastructure spending; evidenced by a 33% increase in infrastructure spending, the establishment of a national infrastructure fund, and revisiting the Public Private Partnership (PPP) framework. Additionally, the clarification of the General Anti-Avoidance Rules (GAAR) and the planned introduction of GST are positive developments. A key message is that the government is focusing on economic growth whilst maintaining fiscal discipline.
India – the investment opportunity
I believe that India is on the path of strong economic growth over the coming years. A recovery in economic growth is expected to be underpinned by improving investment cycles, strong domestic consumption and ‘ease-to-do business’ government initiatives. I maintain my high conviction in India as there are many high quality companies that are in the position to capture structural changes of economic potential in years to come. Looking forward, India is forecast to post one of the highest GDP growth among Asian countries.